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Iron and Steel Authority (ISA) v.

Court of Appeals, 249 SCRA 538

FACTS: Petitioner ISA was created by PD No. 272 in order, generally, to develop and promote the iron and steel industry.

PD No. 272 initially created ISA for a term of 5 years counting from August 9, 1973. When ISAs original term expired on October 10, 1978, its term was extended for another 10 years by EO No. 555 dated August 31, 1979.

The National Steel Corporation (NSC) then a wholly owned subsidiary of the National Development Corporation which is itself an entity wholly owned by the National Government, embarked on an expansion program embracing, among other things, the construction of an integrated steel mill in Iligan City. The construction of such steel mill was considered a priority and major industrial project of the government. Pursuant to the expansion program of the NSC, Proclamation No. 2239 was issued by the President of the Philippines on November 16, 1982 withdrawing from sale or settlement a large tract of public land located in Iligan City, and reserving that land for the use and immediate occupancy of NSC. Since certain portions of the aforesaid public land were occupied by a non-operational chemical fertilizer plant and related facilities owned by Maria Cristina Fertilizer Corporation (MCFC), LOI No. 1277, also dated November 16, 1982, was issued directing the NSC to negotiate with the owners of MCFC, for and on behalf of the Government, for the compensation of MCFCs present occupancy rights on the subject land.

Negotiations between NSC and MCFC failed.

ISSUE: WON the Government is entitled to be substituted for ISA in view of the expiration of ISAs term.


Clearly, ISA was vested with some of the powers or attributed normally associated with juridical personality. There is, however, no provision in PD No. 272 recognizing ISA as possessing general or comprehensive juridical personality separate and distinct from that of the government. The ISA in fact appears to the Court to be a non-incorporated agency or instrumentality of the RP, or more precisely of the Government of the Philippines. It is common knowledge that other agencies or instrumentalities of the Government of the Republic are cast in corporate form, that is to say, are incorporated agencies or instrumentalities, sometimes with and at other times without capital stock, and accordingly vested with a juridical personality distinct from the personality of the Republic.

We consider that the ISA is properly regarded as an agent or delegate of the RP. The Republic itself is a body corporate and juridical person vested with the full panoply of powers and attributes which are compendiously described as legal personality.

When the statutory term of non-incorporated agency expires, the powers, duties and functions as well as the assets and liabilities of that agency revert back to, and are reassumed by the RP, in the absence of special provisions of law specifying some other disposition thereof, e.g., devolution or transmission of such powers, duties and functions, etc. to some other identified successor agency or instrumentality of the RP.

When the expiring agency is an incorporated one, the consequence of such expiry must be looked for, in the first instance, in the charters and, by way of supplementation, the provisions of the Corporation Code. Since in the instant case, ISA is a non-incorporated agency or instrumentality of the Republic, its powers, duties and functions, assets and liabilities are properly regarded as folded back into the Government and hence assumed once again by the Republic, no special statutory provision having been shown to have mandated succession thereto by some other entity or agency of the Republic. In the instant case, ISA substituted the expropriation proceedings in its capacity as an agent or delegate or representative of the Republic of the Philippines pursuant to its authority under PD 272. The principal or the real party in interest is thus the Republic of the Philippines and not the NSC, even though the latter may be an ultimate user of the properties involved.

From the foregoing premises, it follows that the Republic is entitled to be substituted in the expropriation proceedings in lieu of ISA, the statutory term of ISA having expired. Put a little differently, the expiration of ISAs statutory term did not by itself require or justify the dismissal of the eminent domain proceedings.

LUZON DEVELOPMENT BANK, petitioner, vs. ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S. GARCIA in her capacity as VOLUNTARY ARBITRATOR, respondents G.R. No. 120319 October 6, 1995 Facts: From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon Development Bank Employees (ALDBE) arose an arbitration case to resolve the following issue: whether or not the company has violated the Collective Bargaining Agreement provision and the Memorandum of Agreement dated April 1994, on promotion.

At a conference, the parties agreed on the submission of their respective Position Papers on December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its Position Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no Position Paper had been filed by LDB. On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision disposing as follows:

WHEREFORE, finding is hereby made that the Bank has not adhered to the Collective Bargaining Agreement provision nor the Memorandum of Agreement on promotion. Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary Arbitrator and to prohibit her from enforcing the same.


Which court has the jurisdiction for the appellate review of adjudications of all quasijudicial entities


Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall exercise:

(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.

The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him under the provisions therefor in the Labor Code and he falls, therefore, within the contemplation of the term "instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact that his functions and powers are provided for in the Labor Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those of the quasi-judicial agencies, boards and commissions enumerated therein.

This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities not expressly excepted from the coverage of Sec. 9 of B.P. 129 by either the Constitution or another statute. In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known as the Arbitration Law, arbitration is deemed a special proceeding of which the court specified in the contract or submission, or if none be specified, the Regional Trial Court for the province or city in which one of the parties resides or is doing business, or in which the arbitration is held, shall have jurisdiction. A party to the controversy may, at any time within one (1) month after an award is made, apply to the court having jurisdiction for an order confirming the

award and the court must grant such order unless the award is vacated, modified or corrected.

In effect, this equates the award or decision of the voluntary arbitrator with that of the regional trial court. Consequently, in a petition for certiorari from that award or decision, ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals.

Dario vs. Mison (1989) Facts:

When President Cory Aquino came into power, she proceeded to reorganize the government, upon which Mison,the Commissioner of Customs sent notices of termination to 394 Customs officials. Some sought reinstatementfrom the CSC which the latter granted to 279 of them while the others went directly to the Supreme Court. Mison also filed a petition questioning the decision of the CSC. Also, RA 6656 was passed, providing that all officers andemployees who are found by the Civil Service Commission to have been separated in violation of the provisions of this Act, shall be ordered reinstated or reappointed. The validity of this law is also put into question. Held: All the parties agree on the validity of reorganization per se, leaving the question only on its nature and extent.Invariably, transition periods are characterized by provisions for "automatic" vacancies. They are dictated by theneed to hasten the passage from the old to th e new Constitution free from the "fetters" of due process and securityof tenure .At this point, we must distinguish removals from separations arising from abolition of office (not by virtueof the Constitution) as a result of reorganization carried out by reason of economy or to remove redundancy of functions. In the latter case, the Government is obliged to prove good faith. In case of removals undertaken tocomply with clear and explicit constitutional mandates, the Government is not obliged to prove anything becausethe Constitution allows it. Evidently, the question is whether or not Section 16 of Article XVIII of the 1987Constitution is a grant of a license upon the Government to remove career public officials it could have validly doneunder an "automatic"-vacancyauthority and to remove them without rhyme or reason.Simply, the provision benefits career civil service employees separated from the service. And the separationcontemplated must be due to or the result of (1) the reorganization pursuant to Proclamation No. 3 dated March 25,1986, (2) the reorganization from February 2, 1987, and (3) the resignations of career officers tendered in line withthe existing policy and which resignations have been accepted. The phrase "not for cause" is clearly and primarilyexclusionary, to exclude those career civil service employees separated "for cause." In other words, in order to beentitled to the benefits granted under Section 16 of Article XVIII of the Constitution of 1987, two requisites, onenegative and the other positive , must concur, to wit:1. The separation must not be for cause, and2. The separation must be due to any of the three situations mentioned above.By its terms, the authority to remove public officials under the Provisional Constitution ended on February 25, 1987,advanced by jurisprudence to February 2, 1987. 70 It can only mean,

then, that whatever reorganization is takingplace is upon the authority of the present Charter, and necessarily, upon the mantle of its provisions andsafeguards. Hence, it cannot be legitimately stated that we are merely continuing what the revolutionaryConstitution of the Revolutionary Government had started. We are through with reorganization under the FreedomConstitution - the first stage. We are on the second stage - that inferred from the provisions of Section 16 of ArticleXVIII of the permanent basic document. What must be understood, however, is that notwithstanding her immenserevolution ary powers, the President was, nevertheless, magnanimous in her rule. This is apparent from ExecutiveOrder No. 17, which established safeguards against the strong arm and ruthless propensity that accompaniesreorganizations notwithstanding the fact that removals arising therefrom were "not for cause," and in spite of thefact that such removals would have been valid and unquestionable. Noteworthy is the injunction embodied in theExecutive Order that dismissals should be made on the basis of findings of inefficiency, graft, and unfitness torender public service. Assuming, then, that this reorganization allows removals "not for cause" in a manner thatwould have been permissible in a revolutionary setting as Commissioner Mison so purports, it would seem that theCommissioner would have been powerless, in any event, to order dismissals at the Customs Bureau left and right.Lastly, reorganizations must be carried out in good faith. In this case, Mison failed to prove that the reorganizationwas indeed made in good faith because he hired more people to replace those that he fired and no legitimatestructural changes have been made. To sum up, the President could have validly removed officials before theeffectivity of the 1987 Constitution even without cause because it was a revolutionary government. However, from the effectivity of the 1987 Constitution, the State did not lose its right to reorganizeresulting to removals but such reorganization must be made in good faith.

Aquilino Larin vs The Executive Secretary Aquilino Larin was an Assistant Commissioner in the Bureau of Internal Revenue (BIR). He was in charge of the office of the Excise Tax Service. In 1992, the Sandiganbayan convicted Larin for grave misconduct. His conviction was reported to the Office of the President, at the same time, an administrative complaint was filed with the same office. The President then, based on the Sandiganbayan conviction, created a committee to investigate Larin. Eventually, Larins removal was recommended. The President dismissed Larin.

ISSUE: Whether or not Larin was removed from office properly.

HELD: No. Larin is a presidential appointee who belongs to the career service of the Civil Service. Although it is a general rule that the power to remove is inherent in the power to appoint, such power to remove I with limitations. In the case at bar, the limitation can be found in the fact that Larin is a career service officer and under the Administrative Code of 1987, such officers who fall under career service are characterized by the existence of security of tenure, as contra-distinguished from noncareer service whose tenure is co-terminus with that of the appointing authority or subject to his pleasure, or limited to a period specified by law or to the duration of a particular project for which purpose the employment was made. As a career service officer, Larin enjoys the right to security of tenure. He can only be removed from his office on grounds enumerated in the Administrative Code of 1987. In the case at bar, the basis for his removal was his conviction in the Sandiganbayan this is not one of those grounds enumerated in the Administrative Code. Further, the Supreme Court notes that when Larins conviction was appealed to the Supreme Court, the Supreme Court actually absolved Larin.